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Damon Hininger became the CEO of CoreCivic, Inc. (NYSE:CXW) in 2009. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Damon Hininger’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that CoreCivic, Inc. has a market cap of US$2.4b, and is paying total annual CEO compensation of US$2.4m. (This number is for the twelve months until 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$887k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.5m.
Most shareholders would consider it a positive that Damon Hininger takes less compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at CoreCivic has changed over time.
Is CoreCivic, Inc. Growing?
CoreCivic, Inc. has reduced its earnings per share by an average of 10% a year, over the last three years (measured with a line of best fit). In the last year, its revenue changed by just 0.3%.
Sadly for shareholders, earnings per share are actually down, over three years. And the flat revenue hardly impresses. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has CoreCivic, Inc. Been A Good Investment?
Since shareholders would have lost about 12% over three years, some CoreCivic, Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
It looks like CoreCivic, Inc. pays its CEO less than similar sized companies.
Shareholders should note that compensation for Damon Hininger is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. We would not call the pay too generous, but nor would we claim the CEO is underpaid, given lacklustre business performance. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling CoreCivic (free visualization of insider trades).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.